Factories across the country have hummed back to life and electricity plants have continued to sparkle, igniting hopes of a recovery in a Covid-battered economy. The only blip: the hewers of minerals have continued to languish.
Data put out by the government’s statisticians showed that the index of industrial production (IIP) for the month of October climbed to 128.5 — its highest level since November last year — reflecting a year-on-year growth of 3.6 per cent over October 2019’s level of 124.0.
The performance of the overall index was a lot better than the consensus estimate of around 1 per cent ahead of the announcement.
The surge was propelled by 14 of the 23 sub-groups in the manufacturing sector that chalked up positive growth.
Plants making other transport equipment showed the highest growth of 26.6 per cent, followed by electrical equipment (20.3 per cent), motor vehicles and trailer makers (17.7 per cent), and rubber and plastic producers (15.5 per cent).
A downbeat performance was seen in paper and paper products (-20.2 per cent), coke and refined petroleum products (-17.3 per cent), printing and reproduction of recorded media (-12.6 per cent), apparel production (-11.8 per cent), and beverage manufacture (-11.3 per cent).
The IIP is tilted in favour of the manufacturing sector, which has a weightage of 77.63 in the 100-point index.
Electricity generation — which has the smallest weight of 7.99 in the IIP — continued to shine and registered growth of 11.2 per cent, far higher than the 4.9 per cent recorded in October when it turned positive for the first time this fiscal.
Growth in power generation has clambered above the pre-Covid level of 8.1 per cent recorded in February, reflecting rising power consumption in homes that now double as workplaces.
Mining is the only industry group that continued to falter, contracting 1.5 per cent year-on-year.
“The indices of industrial production for the mining, manufacturing and electricity sectors for the month of October 2020 stand at 98.0, 130.7 and 162.2 respectively. These Quick Estimates will undergo revision in subsequent releases as per the revision policy of IIP,” said the statement issued by the ministry of statistics and programme implementation.
Aditi Nayar, principal economist with Icra, said, “While the IIP growth stood at an eight month-high, and displayed its best performance since the pandemic struck, the pace of the improvement in October 2020 was feebler than expected. Coming on the base of a 6.6 per cent contraction in October 2019, the 3.6 per cent growth in IIP in October 2020 is decidedly modest, and suggests that caution in the interpretation of the strength of the economic recovery is still warranted.”
